McDonald’s is making a comeback thanks to a focus on value and new offerings, like a meal inspired by “Minecraft,” which has revitalized its sliding sales in the second quarter.
According to CEO Chris Kempczinski, the introduction of the McValue menu in January is bringing more customers back to McDonald’s locations, even as other fast-food chains see a drop in visits. This new menu allows patrons to buy one item for just $1 when they purchase a full-priced meal, attracting a wider range of customers.
The response hasn’t just been positive in the U.S.; value meals are also seeing strong interest across Europe and other markets. However, McDonald’s is aware that some consumers, particularly those earning $45,000 or less, are still hesitant to visit fast-food outlets due to economic concerns. A decline in visits from these lower-income customers was noted during the April to June period.
Kempczinski pointed out that rising prices are discouraging some customers. Many feel discouraged when they see combo meals priced over $10, which can negatively affect their perception of value. The company is currently working with franchise owners to find ways to reconnect with these consumers.
In April, McDonald’s had a significant success with its “Minecraft Movie” meal, which launched in 100 countries and became the company’s largest global campaign to date, selling out collectible figures in under two weeks.
The sales boost was also attributed to chicken-based items, such as the new McCrispy chicken strips in the U.S. and McWings in Australia. McDonald’s has increased its share in the chicken market across its top ten markets.
The second quarter showed improvement compared to the first, where sales were sluggish as many lower- and middle-income customers cut back on spending. However, visits from middle-class consumers improved this time around.
While McDonald’s experienced growth, competitors like Yum Brands, which owns KFC and Taco Bell, reported disappointing results, with KFC seeing a notable 5% drop in same-store sales in the U.S. Similarly, Chipotle lowered its revenue expectations due to a 4% decline in same-store sales during the same quarter.
In summary, McDonald’s reported a 5% increase in revenue, reaching $6.8 billion, surpassing Wall Street’s expectations. Additionally, same-store sales grew nearly 4%, whereas analysts had predicted a decline. Shares rose 2% in morning trading following the announcement, and net income grew by 11% to $2.25 billion, meeting Wall Street forecasts.
